Chp 2 Information Systems in the Enterprise · Essentials of Management Information Systems Chapter...
Transcript of Chp 2 Information Systems in the Enterprise · Essentials of Management Information Systems Chapter...
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• What are the key system applications in a
business? What role do they play?
• How do information systems support the
major business functions?
• Why should managers pay attention to
business processes?
Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
OBJECTIVES
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• What are the business benefits of using
collaborative commerce, private
industrial networks and enterprise
systems?
• What types of information systems are
used by companies that operate
internationally?
Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
OBJECTIVES
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1. Integration: Different systems serve
variety of functions, connecting
organizational levels difficult, costly
2. Enlarging scope of management
thinking: Huge system investments,
long development time must be guided
by common objectives
Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
MANAGEMENT CHALLENGES
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
Types of Information Systems
Figure 2-1
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
Major Types of Systems
• Executive Support Systems (ESS)
• Decision Support Systems (DSS)
• Management Information Systems (MIS)
• Knowledge Work Systems (KWS)
• Office Automation Systems (OAS)
• Transaction Processing Systems (TPS)
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
TYPES OF INFORMATION SYSTEMS
Figure 2-2
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
Transaction Processing Systems (TPS):
• Basic business systems that serve the
operational level
• A computerized system that performs and
records the daily routine transactions
necessary to the conduct of the business
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
Payroll TPS
Figure 2-3
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
Types of TPS Systems
Figure 2-4
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
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Knowledge Work Systems (KWS):
Knowledge level
• Inputs: Design specs
• Processing: Modeling
• Outputs: Designs, graphics
• Users: Technical staff
Example: Engineering work station
Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
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Management Information System (MIS):
Management level
• Inputs: High volume data
• Processing: Simple models
• Outputs: Summary reports
• Users: Middle managers
Example: Annual budgeting
Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
Figure 2-5
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
Management Information System (MIS)
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• Structured and semi-structured decisions
• Report control oriented
• Past and present data
• Internal orientation
• Lengthy design process
Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
Management Information System (MIS)
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
Decision Support System (DSS):
Management level
• Inputs: Low volume data
• Processing: Interactive
• Outputs: Decision analysis
• Users: Professionals, staff
Example: Contract cost analysis
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
Figure 2-6
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
Decision Support System (DSS)
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
Figure 2-7
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
Decision Support System (DSS)
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
Executive Support System (ESS):
Strategic level
• Inputs: Aggregate data
• Processing: Interactive
• Outputs: Projections
• Users: Senior managers
Example: 5-year operating plan
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
Executive Support System (ESS)
Figure 2-8
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
• Top level management
• Designed to the individual
• Ties CEO to all levels
• Very expensive to keep up
• Extensive support staff
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
Executive support system (ESS)
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
INTERRELATIONSHIPS AMONG SYSTEMS
Figure 2-9
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Major functions of systems:
• Sales management, market research,
promotion, pricing, new products
Major application systems:
• Sales order info system, market research
system, pricing system
Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
Sales and Marketing Systems
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL
ORDER PROCESSING ENTER, PROCESS, TRACK ORDERS OPERATIONAL
MARKET ANALYSIS IDENTIFY CUSTOMERS & MARKETS KNOWLEDGE
PRICING ANALYSIS DETERMINE PRICES MANAGEMENT
SALES TRENDS PREPARE 5-YEAR FORECASTS STRATEGIC
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
Sales and Marketing Systems
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Major functions of systems:
• Scheduling, purchasing, shipping, receiving, engineering, operations
Major application systems:
• Materials resource planning systems, purchase order control systems, engineering systems, quality control systems
Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
Manufacturing and Production Systems
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL
MACHINE CONTROL CONTROL ACTIONS OF EQUIPMENT OPERATIONAL
COMPUTER-AIDED-DESIGN DESIGN NEW PRODUCTS KNOWLEDGE
PRODUCTION PLANNING DECIDE NUMBER, SCHEDULE OF PRODUCTS MANAGEMENT
FACILITIES LOCATION DECIDE WHERE TO LOCATE FACILITIES STRATEGIC
Manufacturing and Production Systems
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
Overview of Inventory Systems
Figure 2-10
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
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Major functions of systems:
• Budgeting, general ledger, billing, cost
accounting
Major application systems:
• General ledger, accounts receivable,
accounts payable, budgeting, funds
management systems
Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
Financing and Accounting Systems
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL
ACCOUNTS RECEIVABLE TRACK MONEY OWED TO FIRM OPERATIONAL
PORTFOLIO ANALYSIS DESIGN FIRM'S INVESTMENTS KNOWLEDGE
BUDGETING PREPARE SHORT TERM BUDGETS MANAGEMENT
PROFIT PLANNING PLAN LONG-TERM PROFITS STRATEGIC
Financing and Accounting Systems
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
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Major functions of systems:
• Personnel records, benefits,
compensation, labor relations, training
Major application systems:
• Payroll, employee records, benefit
systems, career path systems, personnel
training systems
Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
Human Resource Systems
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL
TRAINING & DEVELOPMENT TRACK TRAINING, SKILLS, APPRAISALS OPERATIONAL
CAREER PATHING DESIGN EMPLOYEE CAREER PATHS KNOWLEDGE
COMPENSATION ANALYSIS MONITOR WAGES, SALARIES, BENEFITS MANAGEMENT
HUMAN RESOURCES PLANNING PLAN LONG-TERM LABOR FORCE NEEDS STRATEGIC
Human Resource Systems
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
Figure 2-11
Human Resource Systems
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
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Business processes
• Manner in which work is organized, coordinated, and focused to produce a valuable product or service
• Concrete work flows of material,
information, and knowledge—sets of activities
Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
Business Processes and Information Systems
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
• Unique ways to coordinate work,
information, and knowledge
• Ways in which management chooses
to coordinate work
Business Processes and Information Systems
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
Business Processes and Information Systems
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
Information systems help organizations
• Achieve great efficiencies by automating
parts of processes
• Rethink and streamline processes
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• Manufacturing and production: Assembling product, checking quality,
producing bills of materials
• Sales and marketing: Identifying
customers, creating customer awareness,
selling
Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
Examples of Business Processes
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
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• Finance and accounting: Paying
creditors, creating financial statements,
managing cash accounts
• Human Resources: Hiring employees,
evaluating performance, enrolling
employees in benefits plans
Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
Examples of Business Processes
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
Cross-Functional Business Processes
• Transcend boundary between sales, marketing, manufacturing, and research and development
• Group employees from different functional specialties to a complete piece of work
Example: Order Fulfillment Process
Business Processes and Information Systems
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
Figure 2-12
The Order Fulfillment Process
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
Customer Relationship Management (CRM)
• Manages all ways used by firms to deal with existing and potential new customers
• Business and Technology discipline
• Uses information system to coordinate entire business processes of a firm
Customer Relationship Management (CRM)
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
• Provides end-to-end customer care
• Provides a unified view of customer
across the company
• Consolidates customer data from multiple
sources and provides analytical tools for
answering questions
Customer Relationship Management (CRM)
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
Customer Relationship Management (CRM)
Figure 2-13
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
Supply Chain Management (SCM)
• Close linkage and coordination of activities involved in buying, making, and moving a product
• Integrates supplier, manufacturer, distributor, and customer logistics time
• Reduces time, redundant effort, and inventory costs
Supply Chain Management (SCM)
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
Supply Chain
• Network of organizations and business
processes
• Helps in procurement of materials,
transformation of raw materials into
intermediate and finished products
Supply Chain Management (SCM)
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
• Helps in distribution of the finished
products to customers
• Includes reverse logistics - returned items
flow in the reverse direction from the
buyer back to the seller
Supply Chain Management (SCM)
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
Supply Chain Management
Figure 2-14
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• Decide when, what to produce, store, move
• Rapidly communicate orders
• Communicate orders, track order status
• Check inventory availability, monitor levels
• Track shipments
• Plan production based on actual demand
• Rapidly communicate product design change
• Provide product specifications
• Share information about defect rates, returns
Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
How Information Systems Facilitate Supply Chain Management
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
Limitations:
• Inefficiencies can waste as much as 25%
of company’s operating costs
• Bullwhip Effect: Information about the
demand for the product gets distorted as
it passes from one entity to next
Supply Chain Management (SCM)
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
• Supply chain planning system: Enables
firm to generate forecasts for a product and
to develop sourcing and a manufacturing
plan for the product
• Supply chain execution system: Manages flow of products through
distribution centers and warehouses
Supply Chain Management (SCM)
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
• Uses digital technologies to enable
multiple organizations to collaboratively
design, develop, build, move, and manage
products
• Increases efficiencies in reducing product
design life cycles, minimizing excess
inventory, forecasting demand, and
keeping partners and customers informed
Collaborative Commerce
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
Figure 2-15
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
Collaborative Commerce
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
Private Industrial Networks
• Web-enabled networks
• Link systems of multiple firms in an industry
• Coordinate transorganizational business processes
Industrial Networks
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• Within the business: There are functions,
each having its uses of information systems
• Outside the organization’s boundaries: There are customers and vendors
Functions tend to work in isolation
Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
Traditional View of the Systems
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
Figure 2-16
Traditional View of the Systems
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
Figure 2-17
Enterprise Systems
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
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• Firm structure and organization: One organization
• Management: Firm-wide knowledge-based management processes
• Technology: Unified platform
• Business: More efficient operations and customer-driven business processes
Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
Benefits of Enterprise Systems
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
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• Difficult to build: Require fundamental changes in the way the business operates
• Technology: Require complex pieces of software and large investments of time, money, and expertise
• Centralized organizational coordination and decision making: Not the best way for the firms to operate
Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
Challenges of Enterprise Systems
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
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Four main ways of organizing businesses
internationally:
• Domestic Exporter: Heavy centralization of corporate activities in the home country of origin
• Multinational: Financial management and control out of a central home base, production, sales and marketing operations decentralized
Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
INTERNATIONAL INFORMATION SYSTEMS
Forms of Global Business Organization
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• Franchiser: Product created, designed, financed, and produced in the home country, relies on foreign personnel for production, marketing and human resources
• Transnational: No national headquarters; value-added activities managed from a global perspective, no reference to national borders, sources of supply and demand and local competitive advantage optimized
Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
INTERNATIONAL INFORMATION SYSTEMS
Forms of Global Business Organization
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Four types of system configuration:
• Centralized Systems
• Duplicated Systems
• Decentralized Systems
• Networked Systems
Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
INTERNATIONAL INFORMATION SYSTEMS
Global System Configuration
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Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise
Global System Configuration
INTERNATIONAL INFORMATION SYSYTEMS
Figure 2-18